Sensex and Nifty surge; rupee rises to 64.87 against dollar

The Indian benchmark stock indices BSE Sensex and NSE’s Nifty 50 closed 1.4% higher yesterday following positive cues from European and Asian stock markets. Global equities recovered from losses after reports that the US and China have quietly started negotiations to improve US access to Chinese markets eased fears of a trade war between the two economic giants. The Indian rupee strengthened for the third session against the US dollar. Bond yields gained as traders await details of the central government’s borrowing program for the first half of the fiscal year starting April 1. The BSE Sensex closed higher by 469.87 points, or 1.44%, to 32,066.41, while the Nifty 50 gained 132.60 points, or 1.33%, to close at 10,130.65. The BSE MidCap was up 1.19% and SmallCap rose 0.73%. Sixteen out of 19 sectoral indices on BSE closed higher led by bankex, which was up 2.30%, followed by finance 2.26% and consumer durables 2.24%.On NSE, Nifty PSU Bank rose 4.94%. Yes Bank, SBI, HDFC Bank and Tata Steel were among the top gainers, whereas Wipro, Infosys, Power Grid and Kotak Bank were major losers.The index slipped into its first correction in 15 months on Friday, retreating 10% from a January 29 record close, after the possibility of a US-China trade skirmish triggered a selloff across Asia. “This looks like a pullback rally after touching the oversold levels,” said A K Prabhakar, head of research at IDBICapital. “We don’t see state-run banks falling a lot more from the current levels.”Meanwhile the rupee yesterday closed at near two-week stronger against the US dollar, tracking gains in local equities and Asian currencies markets. This was the third sessions when the rupee closed higher.The home currency ended at 64.87 a dollar — a level last seen on March 14, up 0.23% from its Friday’s close of 65.01. The rupee opened at 64.92 a dollar and touched a high and a low of 64.80 and 64.95, respectively.Bond yields gained as traders await details of the central government’s borrowing programme for the first half of the fiscal year. The government usually announces planned debt sales for April-September period in the last week of March.The 10-year bond yield closed at 7.608% compared to its previous close of 7.557%. Bond yields and prices move in opposite directions.So far this year, the rupee fell 1.5%, while foreign investors have bought $1.67bn in equity and sold $220.40mn in debt market.Asian currencies were trading higher after US treasury secretary Steven Mnuchin said he is optimistic the US can reach an agreement with China over trade tariffs, reducing demand for haven assets, Bloomberg reported.China Offshore spot was up 0.75%, Malaysian ringgit 0.60%, China renminbi 0.58%, Singapore dollar 0.35%, Indonesian rupiah 0.32%, Philippines peso 0.23%, Thai Baht 0.18%, Taiwan dollar 0.17%, South Korean won 0.11%. However, Japanese yen was down 0.35%.The dollar index, which measures the US currency’s strength against major currencies, was trading at 89.203, down 0.26% from its previous close of 89.436.